n business – as in life – we are advised to focus only on controlling the controllables. This is difficult to do in the midst of an unfolding pandemic that threatens human life, State resources and our economic stability. But it is important advice. In addition to helping with the national effort, we each must do what we can to keep our respective industries moving. Writing about the impact of Covid-19 on the economy in the Irish Times earlier this week, Cliff Taylor states that “the key to recovery is how fast restrictions can be lifted” – safely. It has been estimated that GDP could fall by 10.5 percent in 2020 and domestic demand could fall by 15 percent. We know that government borrowing is increasing significantly (conservative estimates are around €23 billion), so if there is to be a realistic prospect of the economy improving in the latter part of this year, there needs to be robust economic activity as soon as restrictions are lifted, however gradually this may happen.
The planning sector is playing its part by keeping Ireland’s planning process functioning to a degree – with the exception of the public consultation elements. The Construction Industry Federation (CIF) has been a driving force in implementing and rolling out new safety and social distancing protocols for building sites, allowing the Housing Agency to reopen 35 ‘essential’ development schemes this week to facilitate the completion of around 1,000 vital social homes. These sites were selected based on submissions from a reported 14 local authorities nationwide to the Housing Agency. This is welcome news given that construction sites around the country have been boarded up for the past month due to ongoing Covid-19 restrictions.
This also prompted a question from the main media ‘If work can recommence on social housing sites, then why not at other housing developments across the country?’ It was widely reported last week that approximately 60,000 homes were at some stage of construction (including planning) at the time of the lockdown – there were 185 active sites in the capital with a combined development value of €4.3 billion. We must note that this 60,000 figure has been disputed by Assistant Professor in the School of Architecture, Planning and Environmental Policy at UCD, Orla Hegarty, in a letter to the Irish Times this week. She maintained that “Department of Housing figures indicate fewer than 25,000 new homes on site, a similar level of output to 2019, when market demand was already uncertain due to high prices”. She went further to say that “the short-term closure of sites may be the least of the problems in the new-build sector, as a further drop in demand is likely to stall speculative development of housing, and also tourism, retail and commercial buildings”. There is an argument to be made that the effects of the coronavirus are simply speeding up trends – particularly in retail – that were already emerging in the Irish marketplace, but that’s a conversation for another day.
In the same letter, the Assistant Professor points out that there is an opportunity to effectively open up public lands to smaller building firms to promote training and employment in the sector, while improving affordability and future competitiveness. That’s definitely something to consider and seeking out these opportunities is something that is within your control right now.
As always, we would be interested to hear your thoughts on what’s happening in your local market.
Director / Business Development
Lotus Investment Group